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New-Build vs Second-Hand Apartment
In Japan, brand-new (shinchiku) carries a premium the way a new car does, and it sheds value the same way the moment someone moves in. Second-hand (chuko) skips that first drop and usually delivers a higher yield, but you inherit the building's age, its reserve fund, and whatever the previous owners deferred. The trade-off is premium and peace of mind versus value and yield, with the building's repair savings pot as the hidden swing factor most foreign buyers never check.
| Aspect | New-build (shinchiku) | Second-hand (chuko) |
|---|---|---|
| Price premium | You pay developer margin, marketing, and a 'first-owner' premium baked into the price; you are buying at the top of the curve. | The first-owner premium is already gone, so the entry price is lower for comparable size and location, freeing capital for other deals. |
| Depreciation curve | Steepest value loss happens in the first years of ownership, mirroring a new car; you absorb that drop personally. | Past the steep early drop and onto a flatter curve, so resale value is more stable relative to what you paid. |
| Rental yield | Lower gross and net yield because rent does not rise to match the premium price; the numbers are thin on day one. | Higher yield for the same rent against a lower price; this is the core reason yield-focused investors lean chuko. |
| Reserve fund (shuzenhi) health | Fresh building, so reserves are low but so are near-term repair needs; risk is that monthly contributions rise sharply later as the schedule kicks in. | Must be checked hard: a well-funded reserve and clean long-term repair plan is a green light; an underfunded one means looming special levies you will help pay. |
| Condition and surprises | Latest earthquake-resistance standards, warranty cover, and no inherited wear; lowest surprise risk and easiest to rent fresh. | Inherit the building's age and any deferred maintenance; older stock may predate current quake standards, so verify the construction year and structure. |
| Financing and tenant appeal | Banks lend readily and tenants pay up for new; strongest financing terms and quickest lease-up. | Financing and tenant appeal are fine for well-located, well-maintained stock, but very old units can face shorter loan terms and pickier lenders. |
The verdict
Yield-focused investors should default to second-hand (chuko): you skip the first-owner depreciation hit and get a better return, provided you verify the reserve fund, repair plan, and earthquake-standard era before signing. Choose new-build (shinchiku) if you want a hands-off, warranty-backed, easy-to-finance asset and are willing to pay for it, typically an end-user or a buyer prioritizing certainty over yield. The decisive check on either side is the building's reserve fund; a cheap chuko with a starved reserve can cost more than a shinchiku, and that single document separates a good deal from a trap.